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1. Company Snapshot

1.a. Company Description

UniFirst Corporation provides workplace uniforms and protective work wear clothing in the United States, Europe, and Canada.The company operates through U.S. and Canadian Rental and Cleaning, Manufacturing, Specialty Garments Rental and Cleaning, and First Aid segments.It designs, manufactures, personalizes, rents, cleans, delivers, and sells a range of uniforms and protective clothing, including shirts, pants, jackets, coveralls, lab coats, smocks, and aprons; and specialized protective wear, such as flame resistant and high visibility garments.


The company also rents and sells industrial wiping products, floor mats, facility service products, and dry and wet mops; restroom and cleaning supplies comprising air fresheners, paper products, gloves, masks, sanitizers, and hand soaps; and other textile products.In addition, it provides first aid cabinet services and other safety supplies; decontaminates and cleans work clothes, and other items that is exposed to radioactive materials; and services special cleanroom protective wear and facilities.Further, it offers a range of garment service options, including full-service rental programs in which garments are cleaned and serviced; lease programs in which garments are cleaned and maintained by individual employees; and purchase programs to buy garments and related items directly.


The company serves automobile service centers and dealers, delivery services, food and general merchandise retailers, food processors and service operations, light manufacturers, maintenance facilities, restaurants, service companies, soft and durable goods wholesalers, transportation companies, healthcare providers, government agencies, research and development laboratories, high technology companies, and utilities operating nuclear reactors, as well as others who require employee clothing for image, identification, protection, or utility purposes.UniFirst Corporation was founded in 1936 and is headquartered in Wilmington, Massachusetts.

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1.b. Last Insights on UNF

UniFirst Corporation's recent performance was impacted by short-term profitability weakness and revenue softness, largely due to one-time factors. Despite this, organic growth and strong performance in First Aid & Safety Solutions provide positive signals. The company expects margin pressure and lower profits through 2026 due to investments in digital transformation. Barclays has an underweight rating on the stock. Engine Capital, a top five shareholder, has issued an open letter to the company's trustees. Bailard Inc. recently bought 3,000 shares, valued at approximately $565,000.

1.c. Company Highlights

2. UniFirst Corporation Delivers Solid Q4 and Full-Year Results

UniFirst Corporation reported a strong fiscal 2025, with full-year revenues reaching $2,432,000,000, a 2.1% increase from fiscal 2024. The company's fourth-quarter revenues were $614,400,000, a 3.4% growth excluding the extra week in fiscal 2024. Adjusted EBITDA reflected solid progress in operational execution and gross margin, with consolidated adjusted EBITDA for the quarter at $88,100,000. Earnings per share (EPS) came in at $2.23, slightly below the actual EPS of $2.28, but above estimates of $2.15. The company's full-year adjusted EBITDA was $319.7 million, and Uniform and Facility Service Solutions had an operating margin of 6.6% and adjusted EBITDA margin of 13.3%.

Publication Date: Oct -23

📋 Highlights
  • Full-Year Revenue Growth:: Fiscal 2025 revenue reached $2,432,000,000, a 2.1% increase from fiscal 2024.
  • Q4 Revenue and Operating Income:: Consolidated Q4 revenue was $614.4 million (+3.4% excluding an extra week), with operating income of $49.6 million.
  • Adjusted EBITDA Progress:: Fiscal 2025 adjusted EBITDA was $319.7 million, with Q4 at $88.1 million, reflecting operational improvements.
  • 2026 Guidance:: Revenue projected at $2.475–$2.495 billion, EPS of $6.58–$6.98, including $7 million in ERP-related costs.
  • Margin Headwinds and ERP Impact:: ERP implementation and investments are expected to reduce margins by ~40 bps in 2026, with $4 million amortization starting midway through the year.

Segment Performance

The Uniform and Facility Service Solutions segment saw 2.6% organic revenue growth, driven by investments made and a softer employment environment. The First Aid and Safety segment is expected to see a 10% revenue increase in fiscal 2026, driven by continued double-digit growth in the van business. The Other segment's revenues are forecast to decline by 16.3% due to the wind-down of a large reactor refurbishment project and a lower number of reactor outages.

Guidance and Outlook

The company expects full-year revenues for fiscal 2026 to be between $2,475,000,000 and $2,495,000,000, with fully diluted EPS between $6.58 and $6.98. Guidance includes $7,000,000 in costs related to key initiatives, primarily the ERP project. UniFirst remains optimistic about driving meaningful improvements in profitability, with a goal of achieving mid-single-digit organic growth and high teens EBITDA margin.

Valuation and Metrics

With a P/E Ratio of 20.4 and EV/EBITDA of 8.82, the company's valuation appears reasonable considering its growth prospects. The Dividend Yield is 0.85%, and Free Cash Flow Yield is 6.01%, indicating a decent return for investors. The company's ROIC is 5.59%, and ROE is 6.88%, suggesting a relatively stable return on investment. The Net Debt / EBITDA ratio is -0.39, indicating a healthy debt position.

Investment Thesis

UniFirst Corporation's solid Q4 and full-year results, combined with its guidance and outlook, suggest a stable investment opportunity. The company's investments in Uniform and Facility Service Solutions and digital transformation are expected to drive growth and improve customer retention. While pricing remains challenging due to inflation fatigue and tariffs, the company's tiered selling approach has diversified its rep base and contributed to sales success.

3. NewsRoom

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River Road Asset Management Addresses UniFirst Board Regarding Shareholder Concerns

Dec -05

Source: globenewswire.com

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Boyar Value Group Urges UniFirst Board to Initiate a Strategic Review Following Rejection of Multiple Credible Acquisition Offers

Dec -04

Source: businesswire.com

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Brandes Investment Partners LP Has $12.57 Million Holdings in Unifirst Corporation $UNF

Dec -03

Source: defenseworld.net

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UniFirst announces primary sponsorship schedule for the 2026 NASCAR Cup Series season

Dec -02

Source: prnewswire.com

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Engine Capital Issues Open Letter to the Independent Directors of UniFirst Corporation

Dec -01

Source: businesswire.com

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Engine Capital Issues Open Letter to the Trustees Controlling UniFirst Corporation

Nov -25

Source: businesswire.com

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UniFirst Remains Compelling In Light Of The Nature Of Its Short-Term Issues

Nov -16

Source: seekingalpha.com

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Bailard Inc. Buys New Shares in Unifirst Corporation $UNF

Nov -15

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.18%)

6. Segments

United States and Canadian Rental and Cleaning

Expected Growth: 3.5%

The 3.5% growth in United States and Canadian Rental and Cleaning from UniFirst Corporation is driven by increasing demand for workplace safety and hygiene, rising need for uniforms and protective gear in industries such as healthcare and manufacturing, and growing adoption of rental and laundry services among businesses seeking cost savings and efficiency.

Manufacturing

Expected Growth: 3.8%

UniFirst Corporation's 3.8% growth in manufacturing is driven by increasing demand for uniforms and facility services, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on operational efficiency, cost savings initiatives, and investments in technology have contributed to improved productivity and profitability.

Net of the Intercompany MFG Elimination

Expected Growth: 0.0%

UniFirst Corporation's stagnant growth of 0.0% is attributed to the elimination of intercompany manufacturing transactions, indicating a neutral impact on revenue. This suggests that the company's internal sales and purchases are offsetting, resulting in no net growth. The lack of growth may also be influenced by industry saturation, intense competition, and stable market conditions.

Specialty Garments

Expected Growth: 4.2%

UniFirst's Specialty Garments segment growth of 4.2% is driven by increasing demand for protective clothing and uniforms in industries such as healthcare, manufacturing, and food processing. Additionally, the company's strategic acquisitions and expansion into new markets have contributed to the growth. Furthermore, the segment has benefited from the trend towards outsourcing of uniform services, resulting in higher sales and revenue.

First Aid

Expected Growth: 3.2%

UniFirst's First Aid segment growth of 3.2% is driven by increasing demand for workplace safety and compliance, expansion into new markets, and a growing need for automated external defibrillators (AEDs) and other first aid products. Additionally, the company's strategic acquisitions and investments in digital platforms have enhanced its product offerings and customer experience, contributing to the segment's growth.

Corporate Functions

Expected Growth: 2.8%

UniFirst Corporation's Corporate Functions segment growth of 2.8% is driven by increasing demand for business process outsourcing, cost savings initiatives, and strategic investments in digital transformation. Additionally, the company's focus on operational efficiency, customer service, and supply chain optimization also contribute to this growth.

7. Detailed Products

Uniform Rental Services

UniFirst provides a wide range of uniform rental services, including garment selection, cleaning, and maintenance, to help businesses maintain a professional image.

Facility Services

UniFirst offers facility services, including restroom and hygiene products, floor mats, and cleaning supplies, to help maintain a clean and safe work environment.

First Aid and Safety Products

UniFirst provides a range of first aid and safety products, including first aid kits, safety glasses, and gloves, to help prevent and respond to workplace accidents.

Cleanroom and Controlled Environment Products

UniFirst offers cleanroom and controlled environment products, including garments, gloves, and cleaning supplies, to help maintain a contamination-free environment.

Promotional Products

UniFirst provides promotional products, including customized apparel, bags, and accessories, to help businesses promote their brand and increase visibility.

8. UniFirst Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for UniFirst Corporation is moderate due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers is low for UniFirst Corporation as the company has a diverse customer base and no single customer accounts for a significant portion of its revenue.

Bargaining Power Of Suppliers

The bargaining power of suppliers is moderate for UniFirst Corporation as the company relies on a few large suppliers for its raw materials, but has some flexibility to switch suppliers if needed.

Threat Of New Entrants

The threat of new entrants is low for UniFirst Corporation as the company has a strong brand presence and significant barriers to entry in the industry.

Intensity Of Rivalry

The intensity of rivalry is high for UniFirst Corporation as the company operates in a highly competitive industry with many established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 3.13%
Debt Cost 3.95%
Equity Weight 96.87%
Equity Cost 8.07%
WACC 7.94%
Leverage 3.23%

11. Quality Control: UniFirst Corporation passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
A O Smith

A-Score: 5.6/10

Value: 3.9

Growth: 5.8

Quality: 8.0

Yield: 4.0

Momentum: 3.0

Volatility: 8.7

1-Year Total Return ->

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ARC Document Solutions

A-Score: 5.2/10

Value: 5.7

Growth: 3.2

Quality: 4.0

Yield: 7.0

Momentum: 5.0

Volatility: 6.0

1-Year Total Return ->

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ABM Industries

A-Score: 4.9/10

Value: 5.6

Growth: 4.1

Quality: 5.2

Yield: 4.0

Momentum: 2.5

Volatility: 8.0

1-Year Total Return ->

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Aramark

A-Score: 4.6/10

Value: 4.3

Growth: 4.3

Quality: 3.4

Yield: 2.0

Momentum: 5.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
UniFirst

A-Score: 4.6/10

Value: 5.8

Growth: 4.6

Quality: 6.2

Yield: 1.0

Momentum: 3.0

Volatility: 7.0

1-Year Total Return ->

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Stock-Card
CBIZ

A-Score: 3.6/10

Value: 3.2

Growth: 5.2

Quality: 5.3

Yield: 0.0

Momentum: 2.5

Volatility: 5.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

179.87$

Current Price

179.87$

Potential

-0.00%

Expected Cash-Flows